ALTM Company expects the following sales amounts for months in the upcoming year:

April: $100,000, May: $115,000 , June: $110,000, July: $120,000 August: $130,000, September: $140,000 , October: $154,000

ALTM past collection 20% in month of sale, 70% in month following sale, 8% in 2nd month following sale, and 2% uncollectible.

Prepare the expected cash collected for the third quarter (July, August, September, and total for the quarter).

What is the accounts receivable balance at the end of September?

Sure, lets break down the problem step by step:

1. Expected Cash Collections: The company collects cash from its sales in the following manner:
   • 20% in the month of sale
   • 70% in the month following sale
   • 8% in the 2nd month following sale

Given this, we can calculate the expected cash collections for each month in the third quarter (July, August, September) as follows:

- **July**: - 20% of July sales = 0.20 * \$120,000 = \$24,000 - 70% of June sales = 0.70 * \$110,000 = \$77,000 - 8% of May sales = 0.08 * \$115,000 = \$9,200 - Total cash collected in July = \$24,000 + \$77,000 + \$9,200 = \$110,200 - **August**: - 20% of August sales = 0.20 * \$130,000 = \$26,000 - 70% of July sales = 0.70 * \$120,000 = \$84,000 - 8% of June sales = 0.08 * \$110,000 = \$8,800 - Total cash collected in August = \$26,000 + \$84,000 + \$8,800 = \$118,800 - **September**: - 20% of September sales = 0.20 * \$140,000 = \$28,000 - 70% of August sales = 0.70 * \$130,000 = \$91,000 - 8% of July sales = 0.08 * \$120,000 = \$9,600 - Total cash collected in September = \$28,000 + \$91,000 + \$9,600 = \$128,600 - **Total for the quarter** = \$110,200 + \$118,800 + \$128,600 = \$357,600

Accounts Receivable Balance at the end of September: The accounts receivable balance is the amount that is still to be collected from sales. Given that 2% is uncollectible, we have:

• Accounts receivable from September sales = 80% of September sales = 0.80 * $140,000 = $112,000
• Accounts receivable from August sales = 8% of August sales = 0.08 * $130,000 = $10,400
• Accounts receivable from July sales = 2% of July sales = 0.02 * $120,000 = $2,400
• Total accounts receivable at the end of September = $112,000 + $10,400 + $2,400 = $124,800

The expected cash collected for the third quarter is $357,600 and the accounts receivable balance at the end of September is $124,800.

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